OT:RR:CTF:TCM H330412 JRG
Center Director
Petroleum Natural Gas and Minerals
Center of Excellence and Expertise
2350 N. Sam Houston Pkwy E.
Houston, TX 77032
RE: Internal Advice Request; Classification of Certain Items Related to a Casing Oscillator
Dear Center Director:
This is in response to the January 13, 2022, request for Internal Advice (IA) submitted on behalf of ROC Equipment, LLC (ROC), regarding the classification of certain merchandise used with the BUMA Casing Oscillator (Casing Oscillator). ROC contends the merchandise should be classified under subheading 8431.43.80, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Parts suitable for use solely or principally with the machinery of headings 8425 to 8430: Of machinery of heading 8426, 8429 or 8430: Parts for boring or sinking machinery of subheading 8430.41 or 8430.49: Other.” For the following reasons, we disagree with the proposed classification.
FACTS:
On October 11, 2020, ROC entered a Starter Casing, a Sectional Casing, Reduction Slips/Inserts, Conical Rings, and a Threaded Ring. The merchandise is intended to be used after importation with the Casing Oscillator, a machine used during drill shaft construction for foundation systems. Due to the length of this ruling and the number of items at issue, descriptions of the products (obtained from the responses to two requests for information (CBP Form 28) that you made to ROC) will be provided below along with the discussion of their classification.
ISSUES:
Whether the subject merchandise are parts suitable for use solely or principally with the machinery of headings 8425 to 8430 (i.e., classified under heading 8431, HTSUS).
And if so, whether the subject merchandise are parts of boring or sinking machinery of subheading 8430.41 or 8430.49 (i.e., classified under subheading 8431.43).
LAW AND ANALYSIS:
In its Internal Advice request, ROC asserts the subject merchandise are parts of the Casing Oscillator, which is in turn properly classified under subheading 8430.41.00, HTSUS, as “other boring or sinking machinery: self-propelled,” because they are specifically designed to be used in the drilling process and required for the Casing Oscillator to properly function.
Classification under the HTSUS is determined in accordance with the General Rules of Interpretation (GRIs) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation (ARIs). GRI 1 provides that the classification of goods shall be “determined according to the terms of the headings and any relative section or chapter notes.” If the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, GRIs 2 through 6 may be applied in order. GRI 6 provides:
For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.
The Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS headings and subheadings at issue are:
7318 Screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers (including spring washers) and similar articles, of iron or steel:
Threaded Articles:
7318.16.00 Nuts . . .
* * *
Non-threaded articles:
7318.29.00 Other . . .
* * *
7326 Other articles of iron or steel . . .
* * *
8430 Other moving, grading, leveling, scraping, excavating, tamping, compacting, extracting or boring machinery, for earth, minerals, or ores; pile-drivers and pile-extractors; snowplows and snowblowers:
Other boring or sinking machinery:
8430.41.00 Self-propelled . . .
* * *
Other machinery, not self-propelled:
8430.69.01 Other . . .
* * *
8431 Parts suitable for use solely or principally with the machinery of headings 8425 to 8430:
Of machinery of heading 8426, 8429 or 8430:
8431.43 Parts for boring or sinking machinery of subheading 8430.41 or 8430.49:
* * *
8431.49 Other:
There is no dispute that the Casing Oscillator is classified under heading 8430, HTSUS. As such, the subsequent discussion occurs at the subheading level applying GRI 6 and examines whether the Casing Oscillator falls under the scope of the term “Other boring or sinking machinery.” Neither the HTSUS nor the ENs define the term “boring or sinking machines.” When a tariff term is not defined by the HTSUS or its legislative history, “the term’s correct meaning is its common meaning.” Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed. Cir. 1994). The common meaning of a term used in commerce is presumed to be the same as its commercial meaning. See Simod Am. Corp. v. United States, 872 F.2d 1572, 1576 (Fed. Cir. 1989). To ascertain the common meaning of a term, we may consult “dictionaries, scientific authorities, and other reliable information sources” and “lexicographic and other materials.” C.J. Tower & Sons of Buffalo, Inc. v. United States, 673 F.2d 1268, 1271 (C.C.P.A. 1982); Simod, 872 F.2d at 1576.
The Oxford English Dictionary defines “boring” as “the action of piercing, perforating, making a bore-hole,” while “sinking” is “the process or act of boring or excavating downwards in search of coal, etc.” Boring, Oxford English Dictionary (11th ed. 2020); Sinking, Oxford English Dictionary (11th ed. 2020).
The Casing Oscillator functions by twisting (oscillating) the Starter Casing’s cutting shoe into the ground. Once deep enough, the Sectional Casing is attached to the Starter Casing to allow for continued operation and the process may be repeated until the desired depth is reached. While this occurs, another machine excavates the earth material within the Casings. When the shaft is deep enough and fully excavated, a rebar cage is installed, concrete is poured, and the Casings are extracted. The Casings provide stability when the earth is unstable or large, deep access shafts are created.
Given the Casing Oscillator drives the Casings into the ground to assist in excavation, it is classified under heading 8430, HTSUS. The Casing Oscillator, however, does not function as a boring or sinking machine, it simply facilitates the use of a boring or sinking machine when soil conditions would make excavation otherwise difficult. ROC concedes that a drill or crane is required when using the Casing Oscillator to both anchor the Casing Oscillator and perform the actual excavation. As such, it falls outside the scope of the provision for “other boring or sinking machinery” of 8430.41.00, HTSUS. It is therefore properly classified under subheading 8430.69.01, HTSUS.
The ENs support this conclusion by stating heading 8430, HTSUS, “covers machinery . . . for ‘attacking’ the earth’s crust (e.g., for cutting and breaking down rock, earth, coal, etc.; earth excavation, digging, drilling, etc.).” Moreover, the ENs indicate “sinking and boring machines” includes “only drilling machines” as “[o]ther quite distinct machines normally used therewith are excluded even if presented with the drilling machines.” As previously discussed, the Casing Oscillator is not a drilling machine rather it requires a separate drill to complete the excavation. Therefore, it is a “distinct machine normally used therewith” and not a sinking and boring machine.
Starter Casing and Sectional Casing
The Starter and Sectional Casings are single-wall steel case tubes with various diameters, including 610mm, 914mm, and 1000mm. The Starter Casing has a steel cutting shoe, which is thicker than the rest of the tube for added strength, welded on to one end and a male joint on the other. The Sectional Casing has a male joint on one end and a female joint on other.
Note 2 to Section XVI, HTSUS, provides, in pertinent part, the following:
2. Subject to note 1 to this section, note 1 to chapter 84 and to note 1 to chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules:
* * *
(b) Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517, and parts which are suitable for use solely or principally with the goods of heading 8524 are to be classified in heading 8529….
The courts have considered the nature of “parts” under the HTSUS and two distinct, though not inconsistent, tests have resulted. See Bauerhin Techs. Ltd. P’ship. v. United States (Bauerhin), 110 F.3d 774 (Fed. Cir. 1997). The first, articulated in United States v. Willoughby Camera Stores, Inc. (Willoughby), 21 C.C.P.A. 322, 324 (1933), requires a determination of whether the imported item is an “integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article.” Bauerhin, 110 F.3d at 778 (quoting Willoughby, 21 C.C.P.A. at 324). The second, set forth in United States v. Pompeo (Pompeo), 43 C.C.P.A. 9, 14 (1955), states that an “imported item dedicated solely for use with another article is a ‘part’ of that article within the meaning of the HTSUS.” Bauerhin, 110 F.3d at 779 (citing Pompeo, 43 C.C.P.A. at 13). Under either line of cases, an imported item is not a part if it is “a separate and distinct commercial entity.” Id. at 779.
While the Starter and Sectional Casings are designed for use with the Casing Oscillator, they are not integral to its function. See Bauerhin, 110 F.3d at 779 (citing Pompeo, 43 C.C.P.A. at 13). The Starter and Sectional Casings are not installed or attached to the Casing Oscillator in a way that allows the machine to oscillate another object. Instead, as noted above, the Starter and Sectional Casings are used by the Casing Oscillator to form a casing string to augment excavation. Furthermore, the Casing Oscillator’s brochure indicates the Casings could be either temporary, meaning they will be extracted and reused, or permanent, where they will remain in foundation. The Casings’ ability to be single-use indicates they are not integral to the Casing Oscillator’s function. Finally, the Sectional Casing can be installed after excavation to stabilize the foundation hole, further evincing it is not a part of the Casing Oscillator. Therefore, the Starter and Sectional Casings will not be classified under heading 8341, HTSUS.
While the Starter and Sectional Casings may appear to be pipes or tubes, their central purpose is to create a casing string to stabilize unstable ground. To perform this function, a cutting shoe is welded to the Starter Casing to allow it to dig into the ground which, in turn, manufactures it into a specific, identifiable article that is more than a pipe or tube. Cf. NY N295526 (April 25, 2018). Moreover, this conclusion is consistent with the ENs for headings 7304, 7305, and 7306, HTSUS, which exclude steel tubes “made up into specific identifiable articles” from those headings. While the Sectional Casing does not have a cutting shoe, it has the necessary male and female joints to connect to the Starter Casing to create a casing string, making it a specific identifiable article as well. Since no heading accurately describes the Starter or Sectional Casing, they are classified in heading 7326, HTSUS, and specifically in subheading 7326.90.86, which provides for “Other articles of iron or steel: Other: Other: Other: Other.”
Reduction Slips/Inserts
The Reduction Slips/Inserts are steel slips pinned into the inside of the Casing Oscillator to allow casings of different diameters to be used. The Reduction Slips/Inserts are designed for use with the Casing Oscillator and integral to its ability to drive casings of different diameters into the ground. As such, the Reduction Slips/Inserts are properly classified as parts of the Casing Oscillator under heading 8431, HTSUS. Based on the classification of the Casing Oscillator, they are specifically classified under subheading 8431.49.90, which provides for “Parts suitable for use solely or principally with the machinery of headings 8425 to 8430: Of machinery of heading 8426, 8429 or 8430: Other: Other: Other: Other.”
Conical Rings and Threaded Ring
The Conical Rings and Threaded Rings are steel parts of the bolting system used to connect the male and female joints of the Casings. The Conical Rings are welded to the machined holes of the male joints and the Threaded Rings are welded into the machined hole of the female joint. Once the female joint of one casing is placed over the male joint of another, large bolts are twisted into the Threaded Rings with the plugs on the back of the bolts sliding into the Conical Rings on the male joint. The Conical and Threaded Rings are preinstalled on the Casings so the Conical Rings and Threaded Ring subject to this ruling are spares for when repairs are needed.
As explained below, the Conical Rings and Threaded Rings are classified under heading 7318, HTSUS, making them parts of general use under Note 2(a) to Section XV, HTSUS, and excluding them from heading 8431, HTSUS, under Note 1(g) to Chapter XVI, HTSUS. Based on their fastening function, Threaded Rings are nuts and, as such, eo nomine classified under heading 7318, HTSUS. “Nut” is not defined in the HTSUS or the ENs. The ASTM’s Standard Terminology for F16 Mechanical Fasteners defines “nut” as an “internally threaded product intended for use on external or male screw threads such as a bolt or a stud for the purpose of tightening or assembling two or more components.” Standard Terminology for F16 Mechanical Fasteners, ATSM International 8 (Dec. 2, 2022). Furthermore, HQ H293256 (June 3, 2019) defined a nut as “a type of fastener which is internally threaded and often used opposite a mating bolt, holding the bolt in place and thus fastening the materials together.” The Threaded Ring is an internally threaded fastener which fastens the two Casings together with the thread of a mating bolt. As such, it is classified under 7318.16.00, HTSUS, which provides for “Screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers (including spring washers) and similar articles, of iron or steel: Threaded articles: Nuts.”
The Conical Rings are also classified under heading 7318, HTSUS, because of their previously discussed fastening role. The bolt is pressed into the tapered center of the Conical Rings to secure the Casings so, given no other subheading accurately describes this function, they are properly classified under 7318.29.00, HTSUS, which provides for “Screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers (including spring washers) and similar articles, of iron or steel: Non-threaded articles: Other.”
HOLDING:
By application of GRIs 1 and 6, the Starter Casing and Sectional Casing are classified under subheading 7326.90.86, HTSUS, which provides for “Other articles of iron or steel: Other: Other: Other: Other.” The general, column one rate of duty for merchandise classified under this subheading is 2.9 percent ad valorem.
By application of GRIs 1 (Note 2(b) to Section XVI) and 6, the Reduction Slips/Inserts are classified under 8431.49.90, HTSUS which provides for “Parts suitable for use solely or principally with the machinery of headings 8425 to 8430: Of machinery of heading 8426, 8429 or 8430: Other: Other: Other: Other.” The general, column one rate of duty for merchandise classified under this subheading is Free.
By application of GRIs 1 (Note 2(a) to Section XV) and 6, the Threaded Rings are classified under subheading 7318.16.00, HTSUS, which provides for “Screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers (including spring washers) and similar articles, of iron or steel: Threaded articles: Nuts.” The general, column one rate of duty for merchandise classified under this subheading is Free.
By application of GRIs 1 (Note 2(a) to Section XV) and 6, the Conical Rings are classified under subheading 7318.29.00, HTSUS, which provides for “Screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers (including spring washers) and similar articles, of iron or steel: Non-threaded articles: Other.” The general, column one rate of duty for merchandise classified under this subheading is 2.8 percent ad valorem.
Duty rates are provided for the internal advice applicant’s convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided online at https://hts.usitc.gov/current. You are to mail this decision to the internal advice requester no later than 60 days from the date of the decision. At that time, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/ which can be found on the U.S. Customs and Border Protection website at http://www.cbp.gov and other methods of public distribution.
Sincerely,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division